Page images

the Secretary determines that exceptional circumstances justify the earlier indemnification or settlement.

(d) Any payment under this part, either to indemnify a Department of Education employee or to settle a personal damage claim, is contingent upon the availability of appropriated funds. (Authority: 20 U.S.C. 3411, 3461, 3471, and 3474)

(2) The recommendation of the head of the employee's principal operating component; and

(3) The General Counsel's ommendation.


(Authority: 20 U.S.C. 3411, 3461, 3471, and 3474)



Sec. 73.1 Cross-reference to employee ethical

conduct standards and financial disclo

sure regulations. 73.2 Conflict of interest waiver. APPENDIX TO PART 73_CODE OF ETHICS FOR

GOVERNMENT SERVICE AUTHORITY: 5 U.S.C. 301, 7301; 18 U.S.C. 208; and E.O. 12674, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 3 CFR, 1990 Comp., p. 306.

SOURCE: 60 FR 5818, Jan. 30, 1995, unless otherwise noted.

860.2 What procedures apply to re

quests for indemnification? (a) When an employee of the Department of Education becomes aware that an action has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee shall immediately notify the head of his or her principal operating component and shall cooperate with appropriate officials of the Department in the defense of the action.

(b) As part of the notification in paragraph (a) of this section or at a later time, the employee may request

(1) Indemnification to satisfy a verdict, judgment,


award entered against the employee; or

(2) Payment to satisfy the requirements of a settlement proposal.

(c)(1) The employee's request must be in writing to the head of his or her principal operating component and must be accompanied by copies of the complaint and other documents filed in the action, including the verdict, judgment, award, settlement, or settlement proposal, as appropriate.

(2)(i) As used in this section, the term principal operating component means an office in the Department headed by an Assistant Secretary, a Deputy Under Secretary, or an equivalent departmental officer who reports directly to the Secretary.

(ii) The term also includes the Office of the Secretary and the Office of the Under Secretary.

(d) The head of the employee's principal operating component submits to the General Counsel, in a timely manner, the request, together with a recommended disposition of the request.

(e) The General Counsel forwards to the Secretary for decision

(1) The employee's request;

873.1 Cross-reference to employee eth

ical conduct standards and finan.

cial disclosure regulations. Employees of the Department of Education are subject to the executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635 and to the Department of Education regulation at 5 CFR part 6301 which supplements the executive branch-wide standards with a requirement for employees to obtain prior approval to participate in certain outside activities. In addition, employees are subject to the executive branchwide financial disclosure regulations at 5 CFR part 2634.

873.2 Conflict of interest waiver.

If a financial interest arises from ownership by an employee-or other person or enterprise referred to in 5 CFR 2635.402(b)(2)of stock in a widely diversified mutual fund or other regulated investment company that in turn owns stock in another enterprise, that financial interest is exempt from the prohibition in 5 CFR 2635.402(a).



Any person in Government service should:

Put loyalty to the highest moral principles and to country above loyalty to persons, party, or Government department.

Subpart C-Post-Award Requirements

FINANCIAL AND PROGRAM MANAGEMENT 74.20 Purpose of financial and program man

agement. 74.21 Standards for financial management

systems. 74.22 Payment. 74.23 Cost sharing or matching. 74.24 Program income. 74.25 Revision of budget and program plans. 74.26 Non-Federal audits. 74.27 Allowable costs. 74.28 Period of availability of funds.

Uphold the Constitution, laws, and regulations of the United States and of all governments therein and never be a party to their evasion.

Give a full day's labor for a full day's pay; giving earnest effort and best thought to the performance of duties.

Seek to find and employ more efficient and economical ways of getting tasks accomplished.

Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept, for himself or herself or for family members, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of governmental duties.

Make no private promises of any kind binding upon the duties of office, since a Government employee has no private word which can be binding on public duty.

Engage in no business with the Government, either directly or indirectly, which is inconsistent with the conscientious performance of governmental duties.

Never use any information gained confidentially in the performance of governmental duties as a means of making private profit.

Expose corruption wherever discovered.

Uphold these principles, ever conscious that public office is a public trust. (This Code of Ethics was unanimously passed by the United States Congress on June 27, 1980, and signed into law as Public Law 96-303 by the President on July 3, 1980.)

PROPERTY STANDARDS 74.30 Purpose of property standards. 74.31 Insurance coverage. 74.32 Real property. 74.33 Federally-owned and exempt property. 74.34 Equipment. 74.35 Supplies and other expendable prop

erty. 74.36 Intangible property. 74.37 Property trust relationship.

PROCUREMENT STANDARDS 74.40 Purpose of procurement standards. 74.41 Recipient responsibilities. 74.42 Codes of conduct. 74.43 Competition. 74.44 Procurement procedures. 74.45 Cost and price analysis. 74.46 Procurement records. 74.47 Contract administration. 74.48 Contract provisions.

[blocks in formation]


74.10 Purpose. 74.11 Pre-award policies. 74.12 Forms for applying for Federal assist

ance. 74.13 Debarment and suspension. 74.14 Special award conditions. 74.15 Metric system of measurement. 74.16 Resource Conservation and Recovery

Act. 74.17 Certifications and representations.

74.70 Purpose.
74.71 Closeout procedures.
74.72 Subsequent adjustments and

tinuing responsibilities. 74.73 Collection of amounts due. APPENDIX A TO PART 74-CONTRACT PROVI

SIONS AUTHORITY: 20 U.S.C. 12210-3 and 3474; OMB Circular A-110, unless otherwise noted.

SOURCE: 59 FR 34724, July 6, 1994, unless otherwise noted.

Subpart A-General

$74.1 Purpose.

(a) This part establishes uniform administrative requirements for Federal grants and agreements awarded to institutions of higher education, hospitals, and other non-profit organizations.

(b) The Secretary does not impose additional or inconsistent requirements, except as provided in $$ 74.4 and 74.14 or unless specifically required by Federal statute or executive order.

(c) This part applies to all recipients other than State and local governments and Indian tribal organizations. Uniform requirements for State and local governments and tribal organizations are in 34 CFR Part 80—Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.

(d) Non-profit organizations that implement Federal programs for the States are also subject to State requirements. (Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)


tachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes, duty, or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the recipient's regular accounting practices.

Advance means a payment made by Treasury check or other appropriate payment mechanism to a recipient upon its request either before outlays are made by the recipient or through the of predetermined payment schedules.

Award means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property, in lieu of money, by the Federal Government to an eligible recipient. The term does not include

(1) Technical assistance, which provides services instead of money;

(2) Other assistance in the form of lo loan guarantees, interest subsidies, or insurance;

(3) Direct payments of any kind to individuals; and

(4) Contracts which are required to be entered into and administered under procurement laws and regulations.

Cash contributions means the recipient's cash outlay, including the outlay of money contributed to the recipient by third parties.

Closeout means the process by which the Secretary determines that all applicable administrative actions and all required work of the award have been completed by the recipient and Department of Education (ED).

Contract means a procurement contract under an award or subaward, and a procurement subcontract under a recipient's or subrecipient's contract.

Cost sharing or matching means that portion of project or program costs not borne by the Federal Government.

Date of completion means the date on which all work under an award is completed or the date on the award document, or any supplement or amendment thereto, on which Federal sponsorship ends.


874.2 Definitions.

The following definitions apply to this part: Accrued expenditures

the charges incurred by the recipient during a given period requiring the provision of funds for

(1) Goods and other tangible property received;

(2) Services performed by employees, contractors, subrecipients, and other payees; and

(3) Other amounts becoming owed under programs for which no current services or performance is required. Accrued income means the sum of(1) Earnings during a given period from

(i) Services performed by the recipient; and

(ii) Goods and other tangible property delivered to purchasers; and

(2) Amounts becoming owed to the recipient for which no current services or performance is required by the recipient.

Acquisition cost of equipment means the net invoice price of the equipment, including the cost of modifications, at

Disallowed costs means those charges to an award that the Secretary determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award.

Equipment means tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, consistent with recipient policy, lower limits may be established.

Excess property means property under the control of ED that is no longer required for its needs or the discharge of its responsibilities.

Exempt property means tangible personal property acquired in whole or in part with Federal funds, where the Secretary has statutory authority to vest title in the recipient without further obligation to the Federal Government. An example of exempt property authority is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306) for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research.

Federal awarding agency means the Federal agency that provides an award to the recipient.

Federal funds authorized means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount may include any authorized carryover of unobligated funds from prior funding periods when permitted by ED regulations or ED implementing instructions.

Federal share of real property, equipment, or supplies means that percentage of the property's acquisition costs and any improvement expenditures paid with Federal funds.

Funding period means the period of time when Federal funding is available for obligation by the recipient.

Intangible property and debt instruments means, but is not limited to, trademarks, copyrights, patents and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock, and other instruments of property owner

ship, whether considered tangible or intangible.

Obligations means the amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period that require payment by the recipient during the same or a future period.

Outlays or expenditures means charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied, and the amount of cash advances and payments made to subrecipients. For reports prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees, and other amounts becoming owed under programs for which no current services or performance are required.

Personal property means property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities.

Prior approval means written approval by an authorized official evidencing prior consent.

Program income means gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award (see exclusions in $ 74.24(e) and (h)). Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in ED regulations or the

terms and conditions of the award, pro- is the systematic use of knowledge and gram income does not include the re- understanding gained from research diceipt of principal on loans, rebates, rected toward the production of useful credits, discounts, etc., or interest materials, devices, systems, or methearned on any of them.

ods, including design and development Project costs means all allowable of prototypes and processes. The term costs, as established in the applicable "research" lso includes activities inFederal cost principles, incurred by a volving the training of individuals in recipient and the value of the contribu- research techniques where these activitions made by third parties in accom- ties utilize the same facilities as other plishing the objectives of the award pesearch and development activities during the project period.

and where these activities are not inProject period means the period estab- cluded in the instruction function. lished in the award document during Small awards means a grant or coopwhich Federal sponsorship begins and erative agreement not exceeding the ends.

small purchase threshold fixed at 41 Property means, unless otherwise U.S.C. 403(11) (currently $25,000). stated, real property, equipment, in- Subaward means an award of finantangible property and debt instru- cial assistance in the form of money, or ments.

property in lieu of money, made under Real property means land, including an award by a recipient to an eligible land improvements, structures and ap- subrecipient or by a subrecipient to a purtenances thereto, but excludes mov- lower tier subrecipient. The term inable machinery and equipment.

cludes financial assistance when proRecipient means an organization re- vided by any legal agreement, even if ceiving financial assistance directly the agreement is called a contract, but from ED to carry out a project or pro- does not include procurement of goods gram. The term includes public and and services nor does it include any private institutions of higher edu- form of sistance which is excluded cation, public and private hospitals, from the definition of "award” as deand other quasi-public and private non- fined in this section. profit organizations such as, but not Subrecipient means the legal entity to limited to, community action agencies, which a subaward is made and which is research institutes, educational asso- accountable to the recipient for the use ciations, and health centers. The term of the funds provided. The term may may include commercial organizations, include foreign or international organiforeign or international organizations zations (such as agencies of the United (such as agencies of the United Na- Nations) at the discretion of the Sections) which are recipients, subrecipi- retary. ents, or contractors or subcontractors Supplies means all personal property of recipients or subrecipients at the excluding equipment, intangible propdiscretion of the Secretary. The term erty, and debt instruments as defined does not include government-owned in this section, and inventions of a concontractor-operated facilities re- tractor conceived or first actually research centers providing continued duced to practice in the performance of support for mission-oriented, large- work under a funding agreement (“'subscale programs that are government- ject inventions"), as defined in 37 CFR owned or controlled, or are designated Part 401–Rights to Inventions Made by as federally-funded research and devel- Nonprofit Organizations and Small opment centers.

Business Firms Under Government Research and development means all Grants, Contracts, and Cooperative research activities, both basic and ap- Agreements. plied, and all development activities Suspension means an action by the that are supported at universities, col- Secretary that temporarily withdraws leges, and other non-profit institu- Federal sponsorship under an award, tions. “Research” is defined as a sys- pending corrective action by the recipitematic study directed toward fuller ent or pending a decision to terminate scientific knowledge or understanding the award by the Secretary. Suspenof the subject studied. “Development” sion of an award is a separate action


« PreviousContinue »